Why do TOC do not properly display levels,... even after I set them to?

Question

All,
I am having a major hard time trying to get my TOCs to properly display levels. I have been doing research on the subject, but it seems any recommendations have proved futile.
The issue:
My ID docs TOC's do not display levels at all
I have pretty much tried everything. I have gone to simple styles for Chapters and Sub Chapters to see what the issue would be
Image:
Some Findings
One article I found which outlined ID having issues with inset text boxes
It seems setting an inset on text boxes with TOC content affects the display of such
I tried removing any insets but results still did not fix the issue i face
Questions
What the hell am i doing wrong?
Is this a bug in ID CS6?
Is there anything I should not be doing when formatting a style that will be used on the TOC?
Are there any "NO NOS" I should be aware of here?
I mean, the above image is a test i built using a bare bones approach. The "Chapters" and "Sub Heads" styles are truly basic formats. The only attributes to these styles is a change in font style and size:
Thank you to anyone who can help me on this.
PixelNovae
ID 6 (v8.0)

Answer 1

Hi all,
Thanks to everyone for all your comments.  To remove any possible conflicts, I did not apply any entry styles to the entries because i thought:
The TOC function generate levels independent of styles
Levels are automatically applied to any entry (TOC levels override everything else)
That levels override any styles one may apply to the entry
Basically, I do not need a style to create an indentation in my TOC. Levels create the indentation. (thus my example using the default ID Basic Paragraph Style)
Are the above assumptions wrong? If I am wrong, then are you guys saying I would need to create a TOC specific style denoting indentation for ever level?
IOWs, following my example:
Chapters =        LV1     = Create a "TOC Paragraph Style X"  that indents (say) 0pxs
Sub Heads =     LV2     = Create another "TOC Paragraph Style Y" that indents (say) 20pxs
On the table of contents I would need to apply each their corresponding style in order to create TOC indents:
"Chapters" ---> TOC Paragraph Style X
"Sub Heads" ---> TOC Paragraph Style Y
If this is the fix, then I must say that this is a very cumbersome approach. (Hell, I would ask, why give me the levels option in the firts place in the TOC dialogue box!) If I have a book with a ton of levels, it will be pretty darn hard to manage so many styles.
PS: sorry I omitted one dialogue screen in my original post. Here is what I am doing.
Thanks again. I'm perplexed at this, but nevertheless thankful for all your shared insight.
PixelNovae
ID CS 6